BBVA Advises Wealthy Clients to Allocate 3% to 7% of Portfolios to Bitcoin

BBVA, a prominent Spanish lender, has taken a significant step in embracing cryptocurrencies by advising its wealthy clients to allocate a portion of their portfolios to digital assets. Philippe Meyer, Head of Digital & Blockchain Solutions at BBVA Switzerland, revealed at a conference that the bank's private banking division recommends allocating 3% to 7% of portfolios to Bitcoin, depending on the client's risk tolerance. This move is part of a broader trend where mainstream banks are beginning to recognize the potential of cryptocurrencies, despite the sector's historical risks.

BBVA started advising its private clients on Bitcoin investments in September of last year. The bank allows clients to invest up to 7% of their portfolios in cryptocurrencies, reflecting the higher risk associated with these assets. This shift is driven by the recent surge in cryptocurrency prices, with Bitcoin reaching its highest record in May. The recovery from the lows recorded in 2022, following the collapse of major exchanges like FTX, has also contributed to this change. Support from US President Donald Trump’s pro-crypto stance has further aided the recovery of the crypto market.

While private banks often facilitate crypto purchases at clients’ request, BBVA is one of the first major global banks to actively recommend investing in digital assets. The bank has been fulfilling client requests to purchase cryptocurrencies since 2021 and plans to include more cryptocurrencies in its recommendations later this year. Clients have generally responded positively to this advice, dismissing fears about the assets being too risky. Meyer explained that adding 3% of Bitcoin to a balanced portfolio can significantly improve performance without taking on substantial risk.

Despite the growing acceptance of cryptocurrencies by mainstream banks, regulators continue to caution about the dangers associated with these digital assets. The European Securities and Markets Authority (ESMA) has warned that issues in the cryptocurrency industry could threaten the stability of financial markets in the future. This call for caution follows concerns about the potential risks to financial stability from the crypto sector, which, although still small, requires ongoing careful observation. ESMA's executive director, Natasha Cazenave, highlighted that even problems in these small markets can lead to wider issues in the financial system.